Hello all, I recently left a business that I co-founded so that I could create a new company. The company I left is very successful, I can proudly use that company as a reference to potential lenders / investors. Unfortunately I didn’t have a big cash out, so I don’t sit with much cash to start my new venture. I am estimating that I will need $75,000 year 1, $50,000 year 2 and potentially $50,000 in year 3.
That $$ would go towards R&D, materials, marketing, trade show attendance, production and a staff of two employees. I would not be taking pay from the company until it is profitable.
Here are some details about my new venture :
- It will be retail company selling a physical product.
- My product will have innovations that will make it unique in the market.
- It will be in the same industry that I left, so I will be starting my new business with over 8 years of proven success.
- I already have a large portfolio of buyers whom I have collected over 8 years of networking in my industry. These buyers would be loyal to me.
- I own a house with about $100000-$150000 in equity which I can use as collateral.
- I have another real estate asset I can also use as collateral if needed.
So far here are the 5 methods of startup funding I have seen :
- Angel Investor
- Friends / Family
- Cloud Funding
- SBA
- Traditional Bank Loan
I personally would like to eliminate option 2, I have not had the best experience with friends and family. Too much emotion involved
The SBA sounds attractive, but I have been hearing mixed things. Some people are saying they offer funding for small startups (which I am), and others are saying that they aren’t offering that anyone.
Would the SBA be a good fit for me? If not what would you recommend and why?
Thank you in advance!
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